President Obama addresses health reform during State of the Union, industry responds

WASHINGTON — A call to make 2014 a year of action and for the government to work on behalf of Americans was the underlying theme of President Obama’s State of the Union address Tuesday evening.

During his remarks, Obama touched upon a string of topics ranging from immigration reform, to education, to job creation. He also called for the raising of minimum wage and urged businesses to do what they can to raise employees’ wages, citing Costco as an example.

And, of course, health reform was no doubt a topic of discussion during Tuesday evening’s address.

“For decades, few things exposed hard-working families to economic hardship more than a broken health care system. And in case you haven't heard, we're in the process of fixing that. … Health insurance reform is all about, the peace of mind that if misfortune strikes, you don't have to lose everything,” Obama said.

During his address, Obama noted that, because of the Affordable Care Act, more than 3 million Americans under 26 years of age have gained coverage under their parents' plans, and that more than 9 million Americans have signed up for private health insurance or Medicaid coverage.

Obama’s comments and policies, however, drew some criticism and sparked what Rep. Cathy McMorris Rodgers, R-Wash., a call to “real action.”

“Not long ago I got a letter from Bette in Spokane, who had hoped the President’s health care law would save her money – but found out instead that her premiums were going up nearly $700 a month. … No, we shouldn’t go back to the way things were, but this law is not working. Republicans believe health care choices should be yours, not the government’s,” said McMorris Rodgers, who was tapped by congressional leaders to deliver the Republican response to Obama’s address.

Described by the National Assocation of Chain Drug Stores as a "friend of pharmacy," McMorris Rodgers introduced bipartisan legislation — the Medication Therapy Management Empowerment Act of 2013 — with Reps. Ron Kind, D-Wisc.; Lee Terry, R-Neb.; and Bruce Bradley, D-Iowa, to expand access to medication MTM services for senior citizens enrolled in the Medicare program.

On Wednesday morning, several industry associations responded to the address, including the Generic Pharmaceutical Association and the Pharmaceutical Research and Manufacturers of America.

“In last night’s State of the Union address, President Obama said, ‘Today in America… [a] rural doctor gave a young child the first prescription to treat asthma that his mother could afford,’ vividly capturing the critical importance of access to safe, affordable medicines for our nation’s patients and our health care system,” stated Ralph G. Neas, president and CEO of the GPhA. “Indeed, in the 30 years since the enactment of the enormously successful Hatch-Waxman law in 1984, which struck a balance between competition and innovation in the pharmaceutical marketplace, generic utilization has now grown to be 84% of medicines dispensed. This success has generated savings for the U.S. health system of $217 billion in 2012 and $1.2 trillion over the most recent decade, according to the fifth annual Generic Drug Savings in the U.S. report.”

GPhA argued that the FDA’s current Proposed Rule on Labeling would undermine the Hatch-Waxman Act, putting both patient safety and health care savings at risk.

“As drafted, the proposed rule would create substantial confusion for pharmacists, doctors, nurses, patients and others in the health care system by allowing for multiple, different drug labels in the market for the very same product, upending 30 years of law and regulation,” Neas stated.

Meanwhile, PhRMA president and CEO John Castellani issued a statement that read, "President Obama’s address comes at a time when America’s biopharmaceutical research companies are bringing pioneering new medicines to patients, supporting high-value American jobs and helping strengthen local communities and our national economy. Continued progress – the kind that President Obama urged for last night – is only possible, however, if we fully embrace innovation.”

Castellani added that the association will “continue to work with the Administration and members of Congress on bipartisan solutions that can help spur growth in the U.S. economy, ensure patient access to new medicines, and foster future development of life-saving medicines.”

Responding to Obama’s announcement during his address to sign an executive order increasing the federal minimum wage to $10.10 per hour for workers on new government contracts and ask Congress to approve the same increase for all workers, NRF president and CEO Matthew Shay stated, “If you want to create minimum opportunities, then raise the minimum wage. We welcome the president’s focus on the economy and jobs, but a minimum wage hike runs counter to that goal. Raising the minimum wage would place a new burden on employers at a time when national policy should be focused on removing barriers to job creation, not creating new regulations or mandates. It’s simple math – if the cost of hiring goes up, hiring goes down.

Shay added that, “Fewer than 5% of hourly workers are paid the minimum wage. It’s really a starting wage that allows teen-agers or others with little job experience to enter the workforce. A mandated hike in labor costs would negatively impact businesses that employ people in entry-level jobs and ultimately hurt the people it is intended to help. This isn’t economic theory – when the minimum wage went up in 2009, half a million part-time workers lost their jobs. That’s a risk our economy can’t afford to take.”

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